Nebraska Senators Stampede for Big Alcohol Tax Breaks

Attorney General Bruning Leads Charge to Lower Taxes on Alcopops and Endanger Youth Health and Safety

SAN FRANCISCO, March 22, 2012 /PRNewswire-HISPANIC PR WIRE/ -- In a disturbing turn of events, the Nebraska State Legislature is rapidly attempting to repeal the state's Supreme Court decision that sweet-tasting alcopops (flavored malt beverage or FMBs) are distilled spirits, not beer, and should be taxed at a much higher rate. If the Senators succeed, they will protect the sales and profits of alcopops producers while Nebraska youth will continue to be targeted by Big Alcohol's exploitive products and marketing practices.

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"We're not surprised to see the Flavored Malt Beverage Coalition pressure legislators to do their bidding," stated Alcohol Justice Executive Director Bruce Lee Livingston. "We are surprised at Attorney General Jon Bruning's vehement opposition to an alcopop tax level that protects youth – and we are disappointed by the Senators moving so quickly to overturn a law that protects public health."

Attorney General Bruning (a current Republican U.S. Senate candidate) led the charge to appeal a lower court ruling that alcopops were distilled spirits and was joined by the Flavored Malt Beverage Coalition in an amicus brief. The Nebraska Supreme Court however affirmed the lower court ruling for spirits level taxes. LB 824 was then immediately introduced by Senator Russ Karpisek (R-32) to redefine alcopops as beer, to gain preferential tax treatment and avoid being charged the much higher hard liquor tax of $3.75 a gallon compared with 31 cents per gallon for beer.

Research has documented that increasing the price of alcohol reduces the amount of access young people have to these products, and is the most effective policy to reduce alcohol consumption and related harm. But Big Alcohol global producers, like Diageo, Anheuser-Busch InBev and MillerCoors, also have alcopop lines and have promised shareholders to produce more low-tax "malternatives" to grow their beer and alcopop market shares. That strategy would be threatened if LB 824 dies in the state legislature. The new court-approved tax rate for alcopops products could produce an additional $2 to $3 million annually to fight underage drinking in Nebraska.

"We are terribly disappointed that the interests of this powerful industry have trumped the well-being of our children," stated Diane Riibe, Executive Director of Project Extra Mile, a nonprofit group that has been fighting for many years to reduce underage drinking harm in Nebraska. "We hope that the grassroots response to the senators' decision will cause them to reconsider and kill LB 824 before the damage is made permanent."

Alcohol Justice, the national alcohol industry watchdog, is encouraging public health advocates and parents tell the Nebraska legislature to stop LB 824. To take action, go to http://www.AlcoholJustice.org.